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DTN Midday Livestock Comments 04/27 12:17

DTN Midday Livestock Comments          04/27 12:17

   Cattle Futures Locked in Limit Gains   

   Strong Gains develop in livestock futures as a combination of commercial and 
investment buyers flood to the market Thursday morning. This has pushed cattle 
futures limit higher as trade is now locked in daily trading limits. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Aggressive buyer support has flooded into live cattle futures with limit 
gains developing in both live cattle and feeder cattle markets. With April live 
cattle futures expiring Thursday, limitless trade activity has pushed markets 
$4.67 per cwt at midday. Lean hog futures have also posted strong triple-digit 
gains. Corn prices are mixed to higher in light trade. May corn futures are 2 
cents higher. Stock markets are higher in light trade. The Dow Jones is 22 
points higher while Nasdaq is up 23 points.

   LIVE CATTLE:

   Live cattle futures have rallied sharply higher with limit gains quickly 
exploding into the market. April live cattle futures expire at noon Thursday, 
which is creating limitless trade in front month futures, allowing contracts to 
move futures to post $4.67 per cwt gains. June through October contracts are 
locked in limit highs of $3 per cwt gains as traders are looking for strong 
market support through the end of the month. Cash cattle activity has become 
light to moderate at midday given the strength in the futures trade through the 
morning. Live business in the South is seen from $135 to $137, which is 
generally $4 to $6 per cwt higher that last week's price levels. Prices in the 
North are listed around $215 per cwt. This is on average $6 to $7 per cwt 
higher than last week's level. Asking prices are now increasing on cattle still 
left on show lists, but the tone of the market could be set. It is likely that 
the bulk of remaining business may be delayed until Friday. Asking prices on 
remaining cattle are seen at $220 dressed basis and $137 to $138 live basis. 
Beef cut-outs at midday are higher, $1.30 higher (select) and up $0.12 per cwt 
(choice) with moderate movement of 71 total loads reported (25 loads of choice 
cuts, 16 loads of select cuts, 20 loads of trimmings, 9 loads of ground beef). 

   FEEDER CATTLE: 

   Feeder cattle futures have surged to limit higher gains in all but front 
month April contracts. The aggressive move higher comes following the 
lackluster early market interest seen Thursday which gave way to aggressive 
cash market trade in the live cattle markets. A close at these price levels 
would create expanded trading limits in the feeder cattle markets and would add 
to the already volatile cattle markets through the end of the month. 

   LEAN HOGS:

   Strong triple-digit gains have flooded into lean hog futures Thursday with 
nearby support gaining momentum as May contracts remain lightly traded due to 
the light open interest but holding prices at $67 per cwt. The June contract 
remains the main focus at $73 per cwt with trade $2.55 per cwt higher and 
gaining additional buyer support through the end of the week. This is drawing 
additional trade activity through the rest of the complex. Cash prices are 
higher on the Iowa Minnesota Direct morning cash hog report. The weighted 
average price added $0.55 at $55.38 per cwt with the range from $50.00 to 
$57.00 on 2,710 head reported sold. The National Pork Plant Report reported 155 
loads selling with prices added $0.55 per cwt. Lean hog index for 4/25 is at 
$59.93 down $0.23 with a projected two-day index of $59.71 down $0.22. 

   Rick Kment can be reached at rick.kment@dtn.com 


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